Tourism provides launch pad for business growth in China

Creswick Woollen Mills has been a Victorian family business for more than 70 years, but these days the company is looking to China to drive its growth.

The wool producer has invested “hundreds of thousands” in a retail outlet in Melbourne’s iconic Block Arcade, Creswick Woollen Fibres. Co-owner Boaz Herszfeld says part of the business plan for the store is to capture tourist interest.

Boaz and Sharon Herszfeld, Creswick Woollen Mills owners at their new store in The Block in Melbourne. Credit:Jason South

“Our natural fibres are the best in the world, and we’ve made the concerted effort to export through tourism,” Herszfeld says.

Targeting China

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One key part of this is the Chinese market: Herszfeld says about one third of his company’s business now comes from those overseas, with travellers from China and surrounds becoming a key cohort of interest.

The family business has grown to turn over more than $10 million a year since it was founded by Paul Herszfeld in 1947 and now includes eight retail stores, including its original wool mill "tourism experience" in Creswick.

The company has Chinese distribution partners, but a large part of its strategy is connecting with tourists when they’re passing through Victoria.

Creswick is engaged in “relaxed retail”, he says – an enjoyable shopping experience where organised tour groups and individual travellers can experience Australia through the business and take a piece of it home with them.

“We hear of lot of people saying retail is dead, but the truth is people expect more from retail. And for tourists, specifically Asian tourists, they think of Australia as clean and natural,” he says.

The business has its own Wechat channel, is engaged with Chinese shoppers and has created its Block Arcade flagship with the desire to show the world its unique local goods.

Robbie Cooke is the head of Tyro. Credit:Robert Shakespeare

Integrating Alipay

Creswick is not the only one with its eyes on connecting with China while still on our shores. On Tuesday, business-only bank Tyro announced it would be the first Australian institution to integrate China’s Alipay for customer payments.

The deal means its 20,000 business customers will have access to EFTPOS facilities with Alipay integration, giving shoppers access to one of China’s most prolific payments platform, “helping them capitalise on the lucrative and rapidly expanding Chinese visitor market”.

Tyro chief executive Robbie Cooke said around eight per cent of the bank's customers currently offer Union Pay, and the expectation is similar numbers will launch Alipay in the months to come.

In April, Australian Bureau of Statistics data revealed tourists from China had overtaken New Zealanders to become the number one group of inbound visitors to Australia for the first time.

Close to 1.4 million Chinese tourists entered Australia between February 2017 and February 2018.

Connecting through tourism

Those operating in the overseas personal shopper, or daigou, space, say it's a good idea for Australian businesses to build up their profiles at home before venturing overseas.

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Executive director of daigou shopping operation AuMake International, Keong Chan, says Australian businesses have plenty of scope to build their global profiles from right here in Australia. It's easier to convince customers of the authentic Australian elements of a product if they're shopping in the environment where the goods are made.

"The tourism trade is a good way of communicating," he says.

AuMake has generated more than $20 million in revenue over the past year through selling a range of Australian-made brands to Chinese customers, including through local showrooms.

Chan says a whole range of local companies have the "latitude" to reach global audiences, and a lower-risk way of doing this is genuinely connecting with tourists to generate "word of mouth" brand awareness.

"I think it really requires an understanding of how those tourists get to Australia and what they’re looking for," he says.